FREIGHT AUDIT

AUTOMATION

DRIVING COST
EFFICIENCY
AND ACCURACY
THROUGH ARTIFICIAL
INTELLIGENCE
Table of Contents
EXECUTIVE SUMMARY

CURRENT CHALLENGES IN FREIGHT AUDIT

TRENDS IN FREIGHT AUDITING

INTRODUCING ENATE ROBOTIC PROCESS

ORCHESTRATION (RPO)

FREIGHT AUDIT PROCESS FLOW USING

INTELLIGENT AUTOMATION

HOW INTELLIGENT AUTOMATION CAN DRIVE

VALUE IN FREIGHT AUDIT

FREIGHT AUDIT AUTOMATION IMPROVES

COMMUNICATION, BOTH INTERNALLY AND
EXTERNALLY

ABOUT

CONCLUSION
DO YOU Organizations today are dealing with manual, inefficient processes of auditing freight invoices.
With multiple freight invoice handoffs through the journey, the manual effort that goes into auditing

KNOW
voluminous invoices on an ongoing basis consumes both time and money. Discrepancies and errors
in the invoicing process causes a direct impact on costs for retailers, consumer goods companies,
manufacturers, construction companies, healthcare organizations and any other industry that is
dependent on 3PL services, thus significantly affecting the bottom line. For example, in US, auditing
That on an average, organizations pay 7% to 10% helped an entertainment retailer in saving around $35,000 from an incorrect monthly invoice charge
which further substantiates the need of proper auditing.
more in freight expenses than they should due to
billing errors. Without an automated system in place to audit the complete spend coverage of an organization, the
overall accuracy of manually approving and certifying the correctness of spend remains an educated
guess. The industry is moving towards exploring applications of RPA, AI and ML in automating
the verification of spend coverage. RPA can bring about huge benefits in terms of completeness
The freight ecosystem is of coverage, contract terms validation, proactive audit prior to invoice approval, duplication, fraud
vast and complex with detection, verification of taxes, discounts, and many other areas.
many interconnected
functions starting from This Whitepaper aims to showcase how intelligent automation using RPA in Freight Audit can help in
sourcing, manufacturing increase the accuracy of invoice certification and prevent losses due to excessive incorrect spend.
to bringing products to the
consumer. Any organization
dealing with movement
or purchase of freight The world of automation has changed in the past year. Just six
(goods) needs a control months ago, tech and business leaders would lightly suggest
mechanism to ensure
automation ideas, jockey for budget, and get nods and smiles for
accuracy of dealing with
freight invoices received their efforts but little commitment. Now, automation has moved to
from carriers. heated board-level discussions that often end with statements such
as “If we don’t automate everything we can, we may not survive.”

Craig Le Clair, Forrester

CURRENT CHALLENGES
IN FREIGHT AUDIT

COMPLEX PRICING OF DEALING WITH HUMAN LACK OF INSIGHTS

MULTI-MODAL MULTI-VENDOR AND DEPENDENCIES AND AND FORECASTING
TRANSPORTATION MULTIPLE FORMATS ERRORS
Traditional methods do not effectively capture insights from systems and
Freight invoices span multiple In the overall supply chain, Traditional auditing sources across the enterprise and beyond. Sources of data include both
modes of transportation an organization can be methods continue to centralized and structured data and extends to unstructured data available
including air, ocean, road associated with multiple invest in manpower outside of the traditional environment which business is unable to tap
and rail, each of which have vendors with various invoice with little technology aid effectively to get actionable insights. for example:
their own hand-offs and formats and contract thus leaving room for
interdependencies. Dealing obligations. Dealing with incorrect judgements and How many carriers
with multiple pricing types and such complex audit process continuous errors. With How many times has
are meeting their
rates add to the complexity for every invoice can get thousands of invoices the carrier delivered
contractual obligations
of manual approvals. An overwhelming, leading to being processed every on time?
and guidelines?
invoice could have multiple inefficient and untimely month, if variances are not
discount levels, varying price reporting of audit results. Also, captured and addressed
based on Shipment types – each vendor will have their systematically and in real
inbound, outbound, varying own process for dealing with time, these errors add up Are there any carriers How do the current
pricing basis eg: flat, distance disputes , creating delays in and lead to never ending who are consistently contracts measure
based, commodity based etc. payments. cycles of auditing and sending incorrect invoices against prevailing market
or accessorial charges by overhead. that had to be rejected? rates and conditions?
customer and carrier.
 Traditional Freight Audit Process The Solution: Automation
Manual Processing Improves Visibility
WHY
AUTOMATION? Multiple Data Sources Single Source of Clean Data

Allows predictive insights for better

High Risk for Errors
decision making

Includes data across TMS/carriers,

Slow Turnaround
shipment tenders, and track-and-trace

Lack of visibility between billing and the Standardizes and monitors data streams
supplychain and removes exceptions
DATA-DRIVEN
DECISION MAKING IN Fixes mistakes based on past information
FREIGHT AUDITING
According to a research, 15% of all carrier invoices are incorrect and almost 80% of logistics companies overpay for freight
Errors and overcharges services and that is why a freight audit becomes necessary but since the process is tedious and has a high potential for
account for... error and this is where automation comes into the picture.

3.5% Automation has been instrumental in enhancing business processes, saving costs, and optimising workflows across the
world. It ensures that all possible chances of human errors are eliminated and the process is completed as soon as possible
with utmost precision. All the workforce involved in this process could be redirected in improving operations in other parts
... of a total shipping bill.
of the organisation.
TRENDS IN
FREIGHT AUDITING
Some of the trends in freight invoice auditing reported by Cerasis (a GlobalTranz Company), have been mentioned below:

Robotic Process Automation Will Technology Providers Will Continue Third-Party Invoice Auditing Will Be
Drive The Trends In Freight Invoice to Enhance Services for Freight The New Normal for Small Shippers
Auditing Invoice Auditing

Leveraging automation, AI and ML to continuously In all aspects of both RPA and auditing throughout Third-party auditing firms can manage
improve supply chain systems have huge potential. the supply chain, technology will become the requirements throughout the supply chain,
This so-called robot worker or RPA (Robotic primary factor. Moreover, consider the compliance including requests for replenishment, requests for
Process Automation) bots, within the machine effects of freight invoice auditing. Shippers may freight quoting, data aggregation, and information
has the potential to replace repetitive processes reduce risk without actually raising a finger. There dissemination across the enterprise. As a result,
transforming freight invoice auditing. Since are capabilities of analytics; reduction in cases of invoice accuracy, timeliness, and disbursement
auditing is a complicated process that involves over-billing, under-billing, inaccurate classification of payments are done more efficiently, enhancing
matching data between invoices and appropriate of freight, under-standard reporting by carriers of coordination across the supply chain. Therefore,
documentation, it is a logical choice to use RPA. freight status, and numerous other data points. for small to mid-size shippers, third-party invoice
auditing tools and capabilities will become the
new normal.
TRENDS IN
FREIGHT AUDITING

Shippers that realise lower labour While completing payments, Freight Invoice Auditing Trends will
costs can reinvest in logistics automated systems can perform continue to search for opportunities
management through automated real-time audits, minimizing costs across technology for improvement
auditing along the way.
While the advancements in technology primarily
Savings made from the synchronisation of trends Ability to audit a freight quote in real-time, ensure
revolve around the automation of freight invoice
within the enterprise through freight invoice that the freight is correctly billed as soon as the
auditing, the possible use cases for auditing to
auditing can be reinvested within the company to carrier site changes, full verification payment, and
benefit the supply chain continue to grow. Invoice
take advantage of additional types of automation, even run a second check to ensure accuracy later.
auditing is no longer just a market differentiator;
including robotic picking , packing, marking, and It is a performance model that is highly required
it must become the standard to maintain cost
even shipping. In a way, the road to freight invoice by the supply chain to survive and keep costs
control of freight expenditure.
auditing would automatically be an integral under control.
prerequisite for the supply chain to be completely
automated.
 MANUAL IN-HOUSE SHIPMENT AUDIT
MANUAL vs. AUTOMATED OUTSOURCED AUTOMATED SHIPMENT AUDIT
SHIPMENT AUDIT

Resource onboarding, orientation and knowledge transition yeilds diminishing returns Ease of deployment and immediate shipping cost optimization

Identifies upto 50+ shipping invoice errors and service failures by capturing upto 130
Prone to lapses in finding errors and service failures
data points

Draw conclusions for the shipments only within their purview Comparision and benchmarking performances acrosses businesses for better carrier
rate negotiation

Dedicated resource for every carrier and different geographies Manage and analyze shipments from 16+ carriers on a centralized platform

Data silos resulting in inefficient management Visibility into shipment delivery information across organization

Additional resources acquisition as the business scales Enables scalability with ability to handle complex data monitoring

Cumbersome process of data combing to identify exceptions Aids management by exception by flagging the shipments that need attention

Time intensive activity of report creation for every business requirement Intuitive and predictive shipment delivery reports to make smarter logistic decision

Need to be manually updated for every rate fluctuation Automatic carrier rate change updates to the in-built rating systems

Track and manage compliance manually Automatic compliance check based on contractual agreement
INTRODUCING ENATE The Freight Audit process involves information flow between multiple stakeholders

ROBOTIC PROCESS
ORCHESTRATION (RPO) 1 2
RPA bots which are automating Human employees involved in

Furthering Intelligent tasks such as processing

invoices, checking for duplicate
monitoring and error validation
(exception handling) during the
Automation in Freight Audit by entries, and volume discounts process.

connecting humans with bots

It becomes crucial to have smooth work handoffs between humans and bot stakeholders involved in
this process to run it efficiently and accurately. It is also necessary to ensure that the audit trail of the
workflow is maintained, and SLAs are adhered to by these stakeholders.
This is where technologies such as Enate’s Robotic Process Orchestration (RPO) puts forward process
efficiencies.

RPO is a Lite Workflow, BPM, and Work Management platform that acts as a common thread to bind
together all human team members &/or automation technologies into one framework. It features
cutting edge case management, ticket management, email management, and workforce management
capabilities in a single stack, that is light & fast to deploy, and brings in instant governance & control.

If you have implemented automation technologies (RPA, OCR, AI/ML, etc.) into your operations, Enate
will help your automation program by ensuring better human-bot collaboration, governance, and
integration and ensure the end-to-end customer journey is automated.
FREIGHT AUDIT PROCESS
FLOW USING INTELLIGENT
AUTOMATION
Duplicate Invoice and invoice error/ Document Collection
Invoice
Errors
Validation (BOT)
Reports are generated
and avaliable in the
Automated Emails are
sent out to the carrier
mismatch dashboard
Invoices can be fetched BOT starts processing
Dealing with Duplicate invoices remain a common problem, from emails or systems invoices - Duplicate Entry
sometimes sent by vendors by mistake or in certain cases with periodically Invoice Errors, Volume
an intent to defraud. These invoices if not identified will result
ACTORS
Discount Errorr etc.
in huge loses. Automation can detect duplicate invoices at the JOHN
BOT
early stage and raise an alert and also do a risk assessment for (Vendor Agnostic
vendors based on how often these kinds of issues are happening RPA Bot)
either intentionally or otherwise.
MIKE
Human Processor
Below is an orchestrated process overview of intelligent
RPO in Action
automation in the invoice audit process depicting multiple bots
and human actors and how these handoffs can be managed
RPO
automatically through Robotic Process Orchestration with Robotic Process
minimum interventions. orchestration
Bot Exception MIKE
John is a one of the bots who performs a particular task of Handling Process
collecting invoices to identify any duplicate invoices and
generating reports to measure the risk profile of a particular Upon finding exceptions, Post validating the errors,
vendor. Errors are handed of to Human user pushes it for
human to validate reporting

High Level Orchestration Process view

HOW INTELLIGENT AUTOMATION CAN
DRIVE VALUE IN FREIGHT AUDIT
Managing your organization’s transportation costs in today’s competitive environment is critical to controlling the impact on profitability. Adopting Intelligent Automation across the
Freight Audit value chain can bring about consistency and accuracy across the following areas:

COMPLETE SPEND CORRECTNESS OF CHARGES AND CONTRACT

COVERAGE CLASSIFICATION TERMS

Automatic Audit of 100% of Accessorial Validate invoices against

spend, not fraction, flag high Ensure that any accessorial services (Services rendered by carriers in addition to transportation like contract terms, use semantic
risk items for manual review crating, packing, and handling; storage, etc.) were actually received and any discounts applied. analysis to understand
business context; trained
Base Rate
ML models to look for
The base rate ensure that the bill begins with the accurate rate, whether it’s a negotiated or spot
DUPLICATE discrepancies and non-
market rate.
INVOICES compliant invoices
Classification
Ensure that freight is assigned to its appropriate National Motor Freight Classification and charged FRAUD
appropriately. Misclassification can lead to millions in overcharges.
Duplicate invoicesDouble ELIMINATION
billing due to counting one Taxes/Fees
shipment as two or using Ensure all state and local taxes, and the customs fees, tariffs, and international taxes are applied as
different options for invoice suitable. Eliminate fake invoices,
receipt and payment; vendor impersonation
discrepancy between carrier Volume Discounts and shell companies,
and Freight bill numbers RPA can validate invoices against contract terms for discounts, keep track of purchase volumes, flag an unscrupulous practices
invoice for review when it does not comply with the price for the current volume
“The cost of manual
freight invoice processing
is estimated to be in the
range of $15 - $50 per
invoice. Document handling
constitutes the bulk of that
cost, and when an error
is detected, that cost can
increase dramatically.”

“Statistically, 15 percent of all

carrier invoices are incorrect,
and roughly 80 percent of
logistics companies overpay
for freight services.”
FREIGHT AUDIT AUTOMATION
IMPROVES COMMUNICATION,
BOTH INTERNALLY AND EXTERNALLY
An automated system driven by concepts of AI, ML and cognitive intelligence provides centralized
information that can be accessed by all departments, improving internal communication, and
facilitating collaboration across the enterprise through a single source of truth. This eliminates “The larger the shipping volume, the higher the potential is
internal informational silos and guarantees that all departments are looking at a single source of for billing errors. So even with very competent staff, money
truth in terms of synchronized and seamless data. continues to go out the door. It’s primarily when you move
all this data through a single freight audit and payment
Externally, communication is improved because stakeholders can access accurate data in real-
application that you discover how much you’re overpaying
time, affording them the ability to deal with problems as they arise, rather than waiting weeks or
more for them to surface.
and why” - IBM

Companies overpay for shipping not because carriers are dishonest but because Automation can reduce the human dependency, reduce errors, and lets the
high-volume, global shipping operations generate too much data for manual team focus more on other core business. Decision on whether this is done in-
processes to absorb. The number of carrier invoices, the level of detail on each house or outsourced to vendors who are experts in this area is also key.
invoice, and the variance in charges, rates, services and billing practices create While it may not be possible to achieve 100% automation owing to key
an impossible task to manage without automation. human judgements to be taken, a balanced approach of automation and
manual audit would be one of the right approaches.
ABOUT ENATE ABOUT HAPPIEST MINDS
Enate is a UK headquartered Robotic Process Happiest Minds enables Digital Transformation for enterprises and
Orchestration (RPO) platform with an APAC technology providers by delivering seamless customer experience,
office in India. Enate was named a Hot business efficiency and actionable insights through an integrated set of
Vendor 2019 by HFS Research. The platform’s disruptive technologies: big data analytics, internet of things, mobility,
customers include the likes of Mizuho, a cloud, security, unified communications, etc. Happiest Minds offers domain
global banking major, Utmost (Generali centric solutions, IPs in IT Services, Product Engineering, Infrastructure
Link) – an insurance major, and consulting Management and Security. These services have applicability across industry
and professional services organizations like sectors such as retail, CPG, e-commerce, banking, insurance, hi-tech,
Capgemini and a Big 4. engineering R&D, manufacturing, automotive and travel/transportation/
hospitality. As a Mindful IT Company, the focus is on ‘Being Mindful’ and
‘Doing Mindful’ which involves perceiving immersively, processing non-
judgmentally and performing empathetically. 60 minutes in a week is
committed towards inculcating a mindful approach within the organization,
using a select set of tools and techniques. Headquartered in Bangalore,
India, Happiest Minds has operations in the US, UK, The Netherlands,
Australia, Middle East and Turkey.
CONCLUSION
Looking at the above opportunities that exist in
optimizing manpower and reducing costs, robotic
process automation and orchestration is key to
bringing in the transformation that organizations are
looking forward.

www.happiestminds.com